Official Statistics

Methodology and Quality Document - Individual Voluntary Arrangements Outcomes and Providers 2021

Published 1 March 2022

Applies to England and Wales

These annual Official Statistics provide a summary of the outcome status of Individual Voluntary Arrangements (IVAs) registered between 1990 and 2021 in England and Wales, and a breakdown of the number of IVAs registered by provider from 2018 to 2021.

These statistics are designated as ‘Official Statistics’, defined in the Code of Practice for Statistics as statistics that have public value, are high quality, and are produced by people and organisations that are trustworthy.

1. Background

An individual voluntary arrangement (IVA) is a formal debt solution for people unable to pay their debts. Individuals who wish to enter into an IVA must submit an application through an Insolvency Practitioner (IP) who will then contact creditors and gain approval for an IVA proposal. An arrangement is agreed if 75% of more of creditors approve the proposal. The arrangement is then binding on all parties.

It is usual practice for IVAs arrangements to last for five or six years. The debtor must comply with their obligations under the arrangement throughout the duration of the arrangement. If a debtor fails to keep to the terms of the arrangement, the IP will end the arrangement and the IVA is considered ‘terminated’ (or ‘failed’).

IVAs may last longer than the typical five to six-year period for reasons including:

• the individual originally agreeing to an IVA that would last for this length of time;
• payment holidays or another variation of an IVA agreement which has lengthened its original duration;

The Insolvency Service first published these statistics in 2010, implementing a recommendation from the Insolvency Practices Council (IPC) to publish annual statistics showing the current status of IVAs set up since their introduction, to monitor the percentage of terminated (or failed) IVAs.

In response to concerns raised regarding the handling of IVAs in 2008, the Insolvency Service led the development of an “IVA Protocol”, agreed by the IVA standing committee, who meet regularly to provide information about the operation of the IVA Protocol. The aim of the protocol was to encourage best practice and streamline the process for straightforward consumer IVAs. This “IVA Protocol” has been in effect since February 2008 and has been routinely revised accordingly. The latest protocol, and previous versions, can be found on Gov.uk.

The IVA Standing Committee noted that the COVID-19 pandemic may have a direct impact on a consumer’s circumstances and that it may not be possible for some people to meet their obligations under the existing terms of their IVA. In addition, the pandemic may affect the sustainability of any new arrangements. Therefore, in April 2020 the committee drafted temporary guidance allowing flexibility to be applied to IVAs which are already being supervised, as well as new IVAs drafted from April 2020.

The additional guidance was intended to support consumers to enable them to continue with their IVA throughout the COVID-19 pandemic with a sustainable payment plan. The initial version of the guidance allowed individuals with existing IVAs to reduce payments by up to 25% and take a payment holiday of up to three months. Revised guidance in September 2020 increased this to up to a 50% reduction in payments and up to a six-month payment holiday. The guidance ceased on 31 December 2021.

2. Data Sources

These statistics are derived from administrative records held by the Insolvency Service, an executive agency of the Department for Business, Energy and Industry Strategy. More information on the administrative systems used to compile insolvency statistics can be found in the Statement of Administrative Sources.

IVA data used for this report were obtained from the Insolvency Service Case Information System (ISCIS). The information is entered by insolvency practitioners and then uploaded to ISCIS. While some validation checks are undertaken when the information is uploaded, not all errors can be detected. For example, 102 terminated IVAs (0.08% of the total number since 2011) are shown as having a negative duration and a further 115 (0.09%) show a duration of zero days. These are included in the ‘unknown’ category in Table 2. It is unlikely that data entry errors are large enough to substantially change the conclusions of this report.

3. Coverage

Statistics are presented for England & Wales only due to differences in legislation and policy. IVAs in Northern Ireland and Protected Trust Deeds in Scotland are not included in this release. The Accountant in Bankruptcy publishes individual insolvency statistics for Scotland. The Insolvency Service also publishes monthly and quarterly individual and company insolvency statistics for the United Kingdom.

4. Methodology

Case level data for all IVAs registered in each calendar year since 1990 were extracted from administrative records held by the Insolvency Service. For each case, a unique identifier, approval date, registration date, current status (as at 31 December 2021), case firm name, and the date that status was changed was extracted. Any duplicate records in the data were identified and removed from the dataset.

The extracted case level data were aggregated by year of registration and case status as at 31 December 2021, as presented in accompanying Table 1. IVAs that were subsequently revoked or suspended following registration were included in the ‘terminated’ category. All IVAs were therefore allocated a case status of ‘ongoing’, ‘completed’ or ‘terminated’ (see Glossary for definitions).

The time from IVA approval date to termination date was calculated for terminated IVAs. Cumulative percentages were then calculated and presented in Table 2 to show the percentage of IVAs terminated within a specified number of quarters or years from registration.

Case level data were aggregated for IVAs registered in the most recent calendar year (2021) by IVA firm, as presented in Table 3. The firm is recorded in free-text form and therefore some cleansing was performed on the data to merge firms with similar names. Comparison numbers for the firms that managed over 90% of the IVAs in the latest year were also presented for the three previous years.

4.1 Changes since previous release

In this publication, the duration of an IVA is measured as the length of time from the date of approval of creditors to the date it terminated. This improves the accuracy compared to previous publications, which used the date of registration with the insolvency service as the start date and therefore underestimated the duration of terminated IVAs, by about two weeks for most IVAs, but up to a few months where IVA registrations were delayed. For consistency with the other tables and the quarterly insolvency statistics, the registration date is still used to assign an IVA to a particular year. As a result of the change in methodology, the numbers in Table 2 are not directly comparable to previous versions of this publication. However, numbers are no more than 1 percentage point different for any quarter or year and typically differ by much less than this.

In previous versions of this publication, revoked and suspended IVAs were excluded from the total. In this publication, they are included in the terminated category. However, the number of revoked and suspended IVAs is small (less than 0.01% of the total).

5. Revisions

These statistics are subject to scheduled revisions, as set out in the published Revisions Policy. Revisions typically tend to be made as a result of data being entered or changed on administrative systems after the previous publication cut-off date for data being extracted to produce the statistics. Revisions can also be caused by changes in methodology as described above. Such revisions tend to be small in the context of overall totals; nonetheless any figures in this release that have been revised since the previous edition have been highlighted with an [r] in the relevant tables.

6. Quality

This section provides information on the quality of these monthly insolvency statistics, to enable users to judge whether the data are of sufficient quality for their intended use.

The section is structured to align with the Quality Assurance Framework of the European Statistical System for statistical outputs.

Relevance: The degree to which the statistical product meets user needs in both coverage and content.

Key users of insolvency statistics include the Insolvency Service itself, which has policy responsibility for insolvency in England & Wales and for the non-devolved areas within Scotland and Northern Ireland; other government departments; parliament; the insolvency profession; debt advice agencies; media organisations; academics; the financial sector; the business community and the general public. Insolvency statistics are typically widely reported in national, regional and specialist media on the day of release.

The statistical production team welcomes feedback from users of the Insolvency Statistics (current contact details are provided on the front page of the latest release).

Accuracy and Reliability: Accuracy is the proximity between an estimate and the unknown true value. Reliability is the closeness of early estimations to subsequent estimated values.

All formal insolvency procedures entered into by an individual in England and Wales are required by law to be reported to the Insolvency Service. Therefore, the Insolvency Service should hold a complete record of all approved IVAs.

IVAs in England & Wales are counted within the Insolvency Service official statistics releases once they are registered with the Insolvency Service. However, there is often a time lag between the date on which the IVA is accepted and date of registration by licensed insolvency practitioners. If this time lag varied substantially between years, it is possible that the number of IVAs registered in a year would not accurately reflect the number of IVAs actually started within that year. However, current monitoring suggests that the time lag is fairly stable, with most IVAs registered within 14 days of the approval date.

Checks are in place to identify and remove duplication of cases.

Timeliness and Punctuality: Timeliness refers to the elapsed time between publication and the period to which the data refer. Punctuality refers to the time lag between the actual and planned dates of publication.

Data as at 31 December 2021 were extracted in early January 2022. Due to the time required to produce this publication, along with competing demands for the Insolvency Service statistics team including the production of the quarterly insolvency National Statistics in January, this statistical release was published two months after the end of the period to which it refers.

The publication schedule for these statistics, and all other Insolvency Service statistics, can be found on the UK National Statistics Publication Hub.

Comparability and Coherence: Comparability is the degree to which data can be compared over time and domain. Coherence is the degree to which data are derived from different sources or methods, but refer to the same topic, are similar.

The Insolvency Service also publishes quarterly and monthly individual insolvency statistics, that include numbers of registered IVAs. The quarterly National Statistics are the definitive source of the number of IVAs registered each year in England and Wales. The numbers in this release should be consistent with the numbers presented in the October to December 2021 publication.

Accessibility and Clarity: Accessibility is the ease with which users are able to access the data, also reflecting the format in which the data are available and the availability of supporting information. Clarity refers to the quality and sufficiency of metadata, illustrations and accompanying advice.

Insolvency Statistics are available free of charge to the end user on the GOV.UK website. They are released via the Publication Hub and they meet the standards required under the Code of Practice for Official Statistics.

The accompanying data tables are formatted in line with current guidance for producers of official statistics to help improve the usability, accessibility and machine readability of spreadsheets. The Government Statistical Service are continuing to review this guidance and so the presentation of these statistics may change in the future.

Historical insolvency data are also published for the key series, on the National Archives website.

Views on the clarity of the publication are welcomed via the contact details on the cover page of this release.

Any enquiries regarding this document/publication should be sent to us at statistics@insolvency.gov.uk.

7. Glossary

7.1 Key Terms used within this document

Term	Definition
Individual Voluntary Arrangement (IVA)	A voluntary means of repaying creditors some or all of what they are owed. Once approved by 75% or more of creditors, the arrangement is binding on all. IVAs are supervised by licensed Insolvency Practitioners.
IVA: Completion	Where the supervisor has issued a certificate (“the completion certificate”) stating that the debtor has complied with their obligations under the arrangement.
IVA: Ongoing	Where the IVA has commenced and remains in progress.
IVA: Termination	Where the supervisor has issued a certificate (“Certificate of Termination”) ending the arrangement because of the debtor’s failure to keep to the terms of the arrangement. Reasons for termination include, for example, missing payments or falling into arrears, change of circumstances where reduced payments are not agreed, and the discovery of higher debts not included on the initial application.
IVA Protocol	A voluntary agreement providing an agreed standard framework for dealing with consumer IVAs. Where a protocol IVA is proposed and agreed, insolvency practitioners and creditors agree to follow the processes and agreed documentation.